Greece

The Greek debt crisis has impacted the world. Just what are the austerity measures imposed by European Banks on Greece. Here’s the top 5  from CNBC. (CNBC is an ultra pro bank/Wall Street network.) More details at link.

NB all prices are in EUROs not dollars

• Raise Taxes – 7 trillion over next 3/4 years. Includes a 23% value added tax.
• Wage cuts – 15% public sector (huge 25% of Greece is public sector workers.)
• Military Cuts – about .5 trillion
• Social Security costs – about  5 trillion – means test and retirement age moves from 61 to 65.
• Luxury Tax – All they said was thy were going to soak the rich too.

Lets compare this with what the US is doing to balance it budget.  Obviously both parties are to blame and they are far more interested in ideology than solutions. However, one sides total lack of willingness to compromise was pointed out in Obama’s press conference.

Republican’s are not willing even to compromise on

“limiting tax deductions for corporate jets.”

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KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

Shorter Term Outlook.

• Chart of the Day – Shows HFT trading over 15 major exchanges (not dark pools)  - “The image below reflects high frequency trading (HFT) operations with quotes in milliseconds. The sharp increases in the chart are what’s termed “quote stuffing” as the machines try to engineer some action over the four minute span.”

Thanks to Dave Fry. The quote and chart are his

• At the end of he quarter managers of stock funds “window dress” their stocks. Part of this rally is “window dressing” or stock managers buying the “hot” stocks to impress their clients so that they stay invested. The major factor is the HFT are buying. Both the quarter and QE2 end today.

• The McClellan Oscillator (MO) chart rose to +52.72 (above +30 somewhat overbought , above +60 overbought, above +90 OMG overbought) Repeat -The MO has been unable to get above the +50 range for 6 months. It sure looks like the +50 high of the last 6 months is about to fall = long term bullish. Short term almost overbought = Bearish

• $USD The Dollar fell  again significantly -0.55% yesterday. (+/- 0.50 is a significant move and the dollar is usually a contrarian indicator) The trend since May 1 is bullish for dollar and bearish for stocks. Big reversal down in last 3 days. Most of this movement is based on Greece. Short term tend for stocks now = Bullish/Neutral

• Reading The Tea Leaves - Shorter term – Repeat-  A raging bull is stampeding and right now it looks like the only barrier is that markets are almost oversold and what earnings season might have next month.  MO is at +53 almost oversold

Long Term

• Fed tells Wall Street and Banks - it has your back. The Fed with its surprise announcement favoring banks (swipe fees)  over consumers has sent a message to the markets that it will do whatever it takes takes. MC & Visa up 10+% and banks rallied on $8.5 billion BAC settlement. This $ went to big hedge funds etc. not to middle class.

• It certainly looks like the HFT’s can sustain a low volume rally without Fed liquidity (QE2 which ends today). Earnings season, Chinese inflation, or something else may trump this, but for now bulls have regained momentum and the only barrier is overbought markets.

• Obviously, people who buy/sell stocks think the Greek crisis is bullish.

• Reading Tea Leaves - Changing back to NEUTRAL for the summer.

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Your Stock List

Here’s the LINK to a spreadsheet of YSL #4.

YSL #4 beat the benchmark S&P 500. So did YSL 1 & 2 & 3

Remember t0 send in by emails or post in the comment section any choices YOU have for YSL # 5

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500.

NLY - Annaly Capital Mgt. Ultra high dividend stock

Short term strategy is to short overbought stocks. –  Stocks did not rally from their earlier highs so I did NOT “nibble on” the TZA trade. Will do so if the Dow goes up 60+ points and I’m watching.

NB – The long term strategy is no longer to short rallies since outlook has turned to NEUTRAL

Disclosure - I own NLY &  a group of dividend stocks which I have used some short ETF’s to protect. – I buy all stocks mentioned in the hypothetical Investors411 portfolio.

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Look for an enlightened Paul’s Corner every Tuesday & Thursday and the always informative comments section every day.

Paul is on break for a couple weeks.

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The Fed has moved from an expanding money supply to a neutral – No QE #3. Congress is threatening to contract the money supply. “We [the USA] need to grow at this point more than anything else.” Investors411 outlook will remain negative/neutral on the USA unless the Fed and/or congress return to more pro growth policies and/or Euro defaults are resolved.

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

Photo of dead Moslem Freedom Fighters in Stolen Iranian election – Investors411 6/26/09

“Fear Is The Mind Killer”

Frank Herbert’s SF novel Dune was the first place this expression was used.

Fear mongering works especially in politics but it has long lasting and significant consequences.

Back in the 50′s President Eisenhower made a very unpopular decision to support sending a little black girl to an all white school. He sent in the 101 Airborne to protect her. This nation that grew strong because we grew united – all races & religions became more tolerant.

Now The major US news story being fear mongered is the possibility of a Moslem cultural center a few blocks away from the former site of the Twin Towers. Have we all forgot the events of last summer?

On June 21st Investors411 ran the following picture of Moslem Freedom fighter Neda Agha Soltan

How the Fear Mongering Will Spread

• Fear monger advocates in the USA  blame ALL Moslems for the attacks NOT al Quaeda fanatics
• Moslem Jihadist groups like Hezbollah, Hamas, al Qaeda will respond and “say see the USA is not about freedom” as word of the hatred of the Islamic Center in NYC spreads.
• The blood lusting jihadist will hold up the example of the NYC Moslem culture center to all their potential recruits as an example of how ALL Americans hate ALL Moslems.
• Fear mongering right wing polls in the USA will say Hamas, Hezbollah and Ahmadinejad wants a Culture Center. You’re either with them or us.
• And so the fear will grow into a deadly spiral

The fear mongers on both sides will be political winners, and our Military industrial complex (weapons our #1 export and we are 43% to 60% of the worlds military budget) Osama Been Forgotten & company is laughing in his cave at the of thousands of new recruits he will enjoy.

The biggest losers are those who believed this country stood for religious freedom. Not just here but the moderates throughout the Moslem world, especially those moderates like Neda who fought and died on their own or with us in Iran, Iraq, Pakistan, the Sudan or anywhere in the world.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Pitiful volume and flat US market.

Covered Calls

We all owe a debt to JS for an illuminating presentation of a more conservative form of investing.  From the comments section of the blog –

“This is a strategy I use to replace CD’s bonds when rates are extremely low. My goal is to replace the income lost by such low rates. This is NOT a strategy for growth. This is a strategy to severely limit losses.
Example using today’s prices: buy CSCO $21.95; sell a COVERED call for January 2011 at strike price of $17.50. (this means you have sold the right for someone to buy CSCO from you for $17.50 anytime till 3rd Fri in January 2011. You will get $5.00 for selling this option. Why did you do this? Because they paid you a premium above current price for this option: $21.95 minus $5.00 =$16.95 (your net cost of CSCO. Math: 21.95 minus $5.00 =16.95, your net cost. Taken at $17.50 = $.55 profit after 5 months which equals 7.78% year. ( $.55 divided by 5 months =$.11 x 12 [ to get yearly rate] =$1.32 divided by your net cost [$16.95] =7.78%.

Positives: you beat CD rates; you have 20% downside protection (from 21.95 to $16.95). Even with all the fear out there, prices are not highly inflated, so 20% is decent protection.

Remember, this is income part of my portfolio; I’m trying to limit risk as much as possible. CSCO has to go below $16.95 (my net cost) to lose money. You must buy companies that have much cash and won’t go under. Also, after Jan 2011, I can sell another call.

Significant Indexes

• The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar fell -0.50% yesterday. A fall of this magnitude should have translated into a rally in stocks. =
• The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +0.81% yesterday. Has broken up through 50 day moving average. But upside momentum slowing shows possible trend reversal. Overall trend still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to -26.12 = Neutral

Reading Tea Leaves

You have both the dollar dropping significantly and most emerging markets in the third day of a rally. Yet US stocks have failed to move.

Somethings got to give. – Rally Ho. – Perhaps its short term, but it could be a sharp rally as short positions caught off guard. Remember I’m reading tea leaves.

NB – This rally is dominated by BB/HFT traders.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions – EWZ & EWS

Bought  small positions yesterday in EWZ (Brazil) at 69.00  & EWS (Singapore) at 11.99

Will add resource rich Australia EWA in list of ETF’s

Each time we have a MO below 40 and a dip, I plan to buy.  First nibbles and the lower we go the more riskier ETF’s.

Same strategy – Will sell 1/2 ETF at @3 to 5% gain/loss and let the rest ride till the MO moves higher.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

The Cleaver Family from 60′s sitcom Leave it to Beaver.

RIP – Middle Class America

The middle class in America is being systematically wiped out of existence in America by Americas growing wealth oligarchy. Say good bye to The Beaver

Editorial is from Business Insider features 22 statistics showing America Middle Class is headed toward oblivion. This is documented & substantiated evidence that the middle class is being wiped out by the rich oligarchy in the USA. Many many thanks to Robert H for finding this article.  Here’s just a few of those stats –

• 83% of all US stocks are in the hands of 1 percent of the people.
• 66% of the income growth in the USA went to the top 1% of Americans from 2001 to 2007
• 36% of Americans contribute nothing to retirement
• 61% of Americans live mostly paycheck to paycheck in 2009 vs 43% in 2007.
• Bottom 50%of Americans own less than 1% of nations wealth.
• 40% of Americans are employed in low pay  service jobs.
• Competition China garment worker makes 82 cents an hr. Cambodia 22 cents an hr.
• 35.4 is the ave. amount of weeks it takes to find a new job.

The list goes on & on, but you get the picture. Send this to your friends

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for week -The Black Box/High Frequency Traders control the vast majority of trades.

Another typical light/decreased volume rally that has become the norm for the Black Box traders that control the markets.

Major indexes are cutting through support levels like a knife through butter. = Bullish

For only the 8th time in history the Dow has seen triple digit gains over 3 days

Significant Indexes-

• McClellan Oscillator (MO) rose  to +97.25 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO) LINK. –  & Investopedia on –  How the MO works. 79.25 = BEARISH
• US Dollar –  The dollar  fell  -0.46% yesterday [Anything over +/- @0.50 is significant.] The dollar/stocks relationship is strong – Dollar up = stocks down and visa versa. Dollar just broke a major support level yesterday = Bullish
• BDI - The  Baltic Dry Index (Measures cost of shipping – Higher costs good = more being shipped = Bullish. Also, good proxy of China.) BDI was in free fall from a high of @4200 to 1700 . This was a huge -60% drop in 8 weeks is very bearish Often a leading indicator for stocks. Here’s a 3 year chart of BDI for context. The BDI has staged a 7 day+8% rally and is at 1841 = bullish

Reading Tea Leaves-

The Black Box/High Frequency traders are on a buying rampage. You can’t call it a parabolic climax buying spree because of the lack of volume. Then again the BB/HFT have shatted all the former technical rulus about volume.

Because support levels have fallen, any small dip will now probably be bought into by non Black box traders.

Both the dollar and the BDI have clearly reversed their trends.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Updated over weekends Investors411 holds ONE position in SDS at this time

Sticking with overall strategy. But its looks more and more like a trade.  Looks like the original SDS (Short ETF trade) is going to loose $)

Instead of catching a downside move in a bear market , its turned into a downside move in an overbought bull market. This also makes the chances for success less and you have to be a more nimble trader instead of investor.

Strategy - From Monday - The same as before – “If/as US major indexes become more overbought the more ETF’s that sort the market will be purchased. Starting out with SH. Then the higher above 60 the MO goes, the more SDS (200% short the S&P 500) and other even 300% short ETF’s will be used the higher the MO goes.  See POSITIONS section at top of blog for more. Therefore what is happening is a series of trades (Short ETF’s) the more overbought the market becomes.

The same entry/exit strategy applies. Considering dropping exit/entry point to 4 instead of 5%. See Friday’s Investors411 for more. The following trades were made Friday.”

SDS (ETF the shorts the S&P 500 at 200%) was bought at 32.50 Nibbled with just a 2% of portfolio position.

From Yesterday

EWZ (Brazil) an ETF Investors411 owned for years is again outperforming and is a buy the dip opportunity.

GLD - (Gold) has come down off its high and any further dip Investors411 will buy.

Paul & Monitor in the comments section and several of you privately are anxious to reinstate the June 2 2010 YOUR Stock List – Using the old list as a starting point – will try to put a list of a dozen stocks together to buy on a dip.

Right now EWZ is the leading ETF candidate.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Lincoln Douglas Debate

Great Debate

The comment’s section is often the best part of Investors411. Jobs, China, Deficits and revenue have highlighted this debate. Jsovjani has come up with an informative data base on revenue deficits, & revenue.

How much tax revenue growth was there under Clinton vs. Bush vs. Reagan?

I look at the numbers relatively, so this (mostly) avoids having to compensate for population growth, inflation etc. I used the year each President took office as the base. Each new president built on what was already there.

• Clinton inherited Bush Sr.’s budget and by the end of his first year 1993 it was $1,i54 billion.
• During his 8 years in office he raised tax revenue to $1,991 billion in 2001
• The total gain in revenue under Clinton was $837 billion or @ +72%
• Bush Jr. started from the Clinton base of 1,991 and ended in 2009 with yearly tax revenue of $2,105.
• The total gain in yearly revenue under Bush was @ +5%
• Reagan in 1981 yearly tax revenue was $599 billion and when he left office in 1989 it was $991 billion
• Reagan gained @ +65% Of course he did raise taxes many times. Something Republican forget.

You  use the previous year as a base number but the stats come out basically the same. There are cases where cutting taxes can raise tax revenue. But when you consider what Bush inherited and what he left us with and compare it to Clinton or Reagan – Bush tax cuts over 8 years in no way raised significant revenue.

• Clinton beats Reagan and their is a vast improvement in tax revenue building.
• Bush comes in last by a wide wide margin.

As Robert H says numbers are relative.

Stocks

The Black Boxes want to take this market higher. They did yesterday confirming the previous day’s rally.

• The MO moved up to +27.04 NEUTRAL but approaching +60 or oversold levels.
• The BDI took another big -3.87% hit yesterday= Bearish

Looks like another 1 to 2% gain will get us to overbought territory on the MO and a time to take some short positions.

Barr

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Taxes Due Tomorrow -Yuck

Mama Jama has sent in some GOOD tax news (see comments section) Obama’s Recovery Act of 2009/ Part of Stimulus has given A TAX CUT of about 10% to most working class Americans. “Thank You Barak Obama”

How much did you save? Mama Jama & Paul R both saved $800. (Another $400) You can find out how much you saved at – LINK

What’s important about this is as you go though look at what is considered a deduction for this year or next year

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

A little volume behind a very minor gain = no real signal.

Alcoa had a far less than stellar earnings report and was down only 1.58%. = Bullish

INTC, the chip giant reported last night and was up 3% in after hour trading. Another Link Anything related to Intel should move higher today = Bullish

JPM – Up about 4% after earnings this AM = Bullish

McClellan Index is neutral, so it sure looks like stocks are in for another run with the bulls

The TF&A section sure has a lot of GREEN lights.

TYH (ETF that does 3x techs) is over extended,but good short term play

Significant Indexes

• McClellan Oscillator fell  a smidge to -1.57 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – This is still the middle of NEUTRAL territory – technically neither overbought or oversold.
• US Dollar – fell   -0.08% yesterday. [Anything over +/- @0.50 is significant.] Mantra – right now The Dollar Rules Remember, dollar down almost always = stocks up.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

YOUR STOCK LIST

up @24% since 2/11

This list has been developed by YOU sending in your stock picks, we discuss them individually (usually by email) and if they are trending positively they get included in YOUR list. Thanks to many of you who have sent in choices. If you payed attention to the List published on each Tuesday or wednesday, you’ll find a lot of winners.

Caution- This is mostly just technical analysis and lots of other factors enter into a decision to buy or sell

NB -Last Week’s comments in black. This week’s violet. Chart links underlined in Blue.

If you have trouble with terminology email me.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

• CAAS –  China stock . Rallied, then low volume  pull back yesterday. Some risk, but buy the dip. Dipped in low volume after making a higher high – at its buy point.
• CNAM China Stock, . Again more risky, but buy the dip Dipped in lower volume, riskier than CAAS but near support and at buy point. Both above stocks tied to China.
• PCLN –  . Melting up – Buy the dip Slow melt up continued dipped 1% yesterday Would like a bigger dip.
• F –   Looks like its running out of gas – too much downside volume – wait Forming a support level along its 50 day moving average A buy the Dip
• *IMAX .  Melting up – Buy the dip – Big Dip in moderate volume, but seems to be forming support. 3D movies still #1 &#3, but overall box office slow & nothing big till May. Riskier, but a buy the Dip
• CSCO,  Heavy volume dip weak volume recovery Other tech gains AMZN & AAPL look better. Consolidating like AMZN. AAPL overextended now. These giants are the tech leaders. Slower moves than smaller stocks but safer plays. CSCO & AMZN (a bit better)
• SHOO –  Dipped and off to races again. Still buy the dip stock, but now getting riskier. Dipped last two days, but still a bit overextended
• ICON,     Now at breakout point but volume not increasing makes makes it riskier buy Winner, a little overextended – wait for dip
• DGIT –  Weak volume rally – Too risky now. Winner, broke out to new high in heavy volume. went up,down,& up again = bullish. You’d be chasing, but buy a minor dip.
• VCI . A bit heavier volume on up days at resistance again. Risky buy Consolidating and dipping toward 50 day MA/support level. Buy the Dip
• CREE – Should see another lesser jump higher after dip. Buy the Dip Winner, short dip then rallied, now a bit over extended. Chip stock should benefit from INTC earnings. A buy the dip
• SNDK –  riskier than after last rally, but buy the dip Winner, Slow melt up,INTC should benefit, buy the dip
• CTRP –  . Could go either way but volume good on up days – some risk, but A buy the dip stock Dipped in lower volume and seems to found support. Now or never buy.

New plays that have similar 3d fundamentals as IMAX. Personally I’m more comfortable with this group because I believe in the fundamentals behind 3d technology. Some fundamental analysis included. Problem with these are their sales are not pure 3d plays.

• *CNK (Cinemark)  Melt up in weak volume,(like IMAX) buy the dip – Has dipped in increased volume. No big box office shows till May. Short term in trouble.
• *RGC (Regal Entertainment) Moving higher at breakout/resistance level. Buy the dip Same as above. Better buy at end of month after dip.

32 million new heath care customers (Obama/Pelosi health care bill) means some stocks are going to rally on this increased supply and the growing aging population of baby boomers who need health care. New group

• *ESRX (Express Scripts) – Eked out a new high a day ago and dipped a little. A Buy the dip Slow melt up hopefully this is a long term hopefully
• *TEVA (Teva Pharmaceuticals)  . Seems to be consolidating, buy the dip Dipping slowly, in weaker volume, toward 50 Day MA/support. Again hopeful long term buy.

New Stocks – I’d add more but its very time consuming. Many thanks to Paul R, Monitor and some others who prefer to remain nameless for suggestions.

• VLTR Chip stock should befit from INTC. Solid long term pattern of higher highs and lows. recent dip makes for good entry point.
• UAUA (recommended by 2 of you) Great long term pattern. Over extended – right now
• SLAB (recommended by 2 of you) Classic cup and handle breakout. Even more extended – buy a bigger  dip

Analysis – The McClellan Oscillator is still near Zero so overall market upside and downside risk is equal.

• Our 3D/movie plays got spanked last week. Fundamentally, (box office) weak till May openings. Going to sell CNK in any rally today. It’s breakout has failed.
• Heath Care stocks for long term and will add if they dip to 50 day MA.
• Chip and related stocks (examples -VLTR, CREE, SNDK) should sparkle today and good buy the dip candidates.

* = Investors411 has a position in these stocks.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Football lover Karl Marx

Football and Karl Marx

Football is America’s #1 sport. The Superbowl where (economically shattered) New Orleans Saints beat another small market team the powerful Indianapolis Colts, was watched by more viewers here than any other American sporting event.

Football reins supreme because there is parity in the league or socialism. There is a market cap which no team can go over in payment for all combined players, and a draft for new players where the worst teams choose first.  This is a socialist goose that has been laying GOLDEN revenue eggs for the NF. Unlike baseball that’s hurting for revenue and is in decline because of a less balanced revenue program. In Baseball any team outside major media markets has a far less chance at winning. Each stadium gets packed in football, while only a half dozen do in baseball. Karl Marx would clearly be a football fan.

Now owners and players both want to change the system in a rush of unregulated capitalist greed. So if anyone asks you if socialism works in the USA – you say it sure does – its called the National Football League. Socialism Makes Everbody Rich. Why change it?

Elections – Iceland/Iraq

Two major elections took place late last week

• Iceland – Remember Iceland was perhaps the country worst hit in 2008 meltdown because their shadow banks believed in Greed based capitalism. Over 98% of the voters there voted to renegotiate loans of foreign investors who had put their $ in Icelandic banks.  Seems they did not want to pay back billions with their tax dollars.
• Iraq – Over 2 million Iraq refugees voted from Foreign countries. They are too afraid to return. Still the world’s largest refugee crisis. Even with the elections there are many signs that the different religious/ethnic factions have no intentions of compromise. Oh well, neither do the two major parties in the USA.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend. (No changes this weekend)

US equities rallied significantly on Friday. but volume was just a wee bit higher. Long term capital is just NOT flowing into equities in the USA. Unlike the start of the bull market in 2009 when we saw massive amounts of volume. Investors are staying on the sidelines. Volume has been for decades the #1 confirmation factor of a price move. However for the last 6 months its been pretty anemic & useless as a forecasting tool.  Basically this looks technically like we are building a bubble and obviously investors are doubting the rally

The Russell 2000 has already broken out to new highs

Overbought US markets (SPX up 6 days in a row, and up 11 of the last 14 trading days) are all close to new highs. The NASDQ is o.o2 points away from a breakout to a new high.

Last Week’s Fearless Forecast

Investors411 predicted a rally at the week’s start that would get sold into because of an overbought market & the unemployment report – Therefore a “flat week” As stated last Friday - ” The unemployment numbers Friday were as good as it gets for US stocks.” The fact that employment is NOT declining means interest rats will stay low and the Fed will keep flooding the economy with money. From Friday AM -  “Expect a rally.”

Miscalculation about the jobs number (I expected worse than a flat -9.7%) and ignoring looking at the exploding BDI (see below) were the reasons for last week’s miscalculations.

This Weeks Fearless Forecast

The McClellan Oscillator hasn’t been this high (+75.33) since last April. We are also approaching a major resistance level – the January  high of 1150 on the benchmark SPX or S&P 500 (now at 1139).  It seems likely that this level will get challenged.

• Fundamentally it sure looks like the FED has reason NOT to raise interest rates (employment numbers) and that will keep interest rates low – great for stocks.
• The BDI is exploding higher. (see below)
• The Gree debt problem seems to have settled and “will not spread.”
• Any serious attempts at financial regulations seems to be disintegrating.

So fundamentals are moving in one direction against strong technical resistance. Look for a week where at least the NASDQ joins the Russell 2000 and breaks out to a new high, Even though volume is lacking – momentum should make this an up, but volatile week.

Significant Indexes

• McClellan Oscillator jumped significantly to  +75.33 yesterday We are now well above +60 or Overbought territory. StockCharts has a better version of the McClellan chart ($NYMO) LINK. The only other time we saw numbers on the McClellan move higher than this was three times from November to March 2008/2009. The all time high was +121.86 in the last week of last year.
• BDI – The Baltic Dry Index, which measures the cost of world trade (also a good indicator of how China is doing since they are huge exporters/importers) has exploded higher in the last few weeks = Bulls rule
  

Because Investors411 recently changed the Long Term Outlook to Cautiously Bullish - any pullback in the McClellan Oscillator to say +20 would be an opportunity to nibble again.  This market wants to move higher.

Positions

The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

Wish Investors411 had more stock positions (only @20% invested in stocks because of overbought technical situation) Will keep selling into any major rally the remainder of the portfolio.  Certainly a breakout over SPX 1150 would be one of those situations.  Right now what to look for is are stocks going to go “elliptical” (continue to move higher at a rapid rate) and blow through last years high.

Would sell more into that rally and buy/nibble more on any drop in McClellan to @ +20.

IMAX – 3D Alice in Wonderland had a HUGE $116 million dollar opening. Avatar’s opening weekend was $55 million.

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING